Nearly all Americans rely on Social Security for their financial well-being in retirement as well as when a crippling disability strikes in mid-career. Social Security's own financial picture faces huge uncertainties right now, with the Social Security trust funds having released their annual report recently. The results were troubling, as the program continues to head toward a crisis within the next 15 to 20 years. Public outcry about what to do about Social Security's problems is reaching a fevered pitch, but lawmakers have thus far done little to address the situation.
One key way in which the public's views on Social Security are supposed to be represented is through two public trustee positions on the board of trustees that manage Social Security's trust funds. Yet those who look at this year's reports will notice that both spots for public trustees on the six-person board of trustees were vacant. That's been the case on multiple occasions since 2008, and the logjam that has left those spots unfilled has denied the public its right to play its legal role in asserting the needs of ordinary Americans to find some solution to the troubles plaguing Social Security.
The history of the Social Security Trust Funds
The original Social Security Trust Funds have a history dating back to 1939, when the federal government decided that it made sense to set money aside to cover future benefits when they become due and payable. A board of trustees was named to oversee the administration and management of the Social Security Trust Funds. All of the trustees as originally contemplated were either cabinet members or members of the federal bureaucracy, with the Treasury Secretary serving as managing trustee and chair of the group. The Secretary of Labor and the chair of the Social Security Advisory Board were the two other originally named members of the board of trustees. After a time, the Secretary of Health and Human Services took over the Social Security Advisory Board chair's spot on the three-person board.
That arrangement continued in 1956 when the Social Security program was extended to offer disability insurance benefits. A second Social Security Trust Fund was created to hold funding for those disability payments, although the program referred to both funds collectively as the Old Age, Survivor, and Disability Trust Fund or OASDI Trust Fund.
However, in 1983, major changes to the Social Security program led to the addition of two public trustee positions to participate on the board. The moves were recommended by the Greenspan Commission, led by former Federal Reserve chair Alan Greenspan. The idea behind the move was that by letting ordinary citizens participate in the management of the trust funds, the general public would have greater confidence in their financial integrity. The first two public trustees, Mary Falvey Fuller and Suzanne Denbo Jaffe, were named to the board in 1984, and additional pairs joined the list at successive intervals over the years. In 1994, the Social Security Commissioner was added to the board, creating the current six-member configuration that now serves on three separate and distinct boards of trustees: the joint Social Security Trust Funds, the Hospital Insurance Trust Fund for Medicare Part A, and the Supplemental Medical Insurance Trust Fund for Medicare Part B.
What happened to the Social Security public trustees?
According to the 1983 legislation, the two public trustees are to be nominated by the president to serve four-year terms. The Senate is then responsible for confirmation. The only requirement on who can serve is that the two appointments must not be from the same political party. That should make it relatively easy to keep the positions filled.
Yet the government has done a terrible job meeting its obligations to name public trustees for the Social Security Trust Funds. After serving an initial term starting in 2000, John Palmer and Thomas Saving left their roles in 2007 after key Senate leaders had objected to their continuing for a second term, prompting President George W. Bush to use recess appointments. In 2008's report to Congress from the trustees, the two public members weren't listed on the signature page, which instead said that the positions were vacant.
President Barack Obama appointed Charles Blahouse and Robert Reischauer to serve, and their names showed up between 2011 and 2015 on the reports submitted to Congress. On their renomination, the Senate declined to fulfill its confirmation role. Since 2016, subsequent reports have once again listed the positions as vacant.
Why it matters
Without public trustees, the only view that Americans get of Social Security comes from the government itself. Regardless of one's political views or which party occupies the White House, the cabinet members and government officials who serve as trustees can benefit from having an outside perspective from members of the public. Without those public trustees, Social Security's Trustee Reports don't have as much credibility, allowing the management of those key assets to come into question.
President Donald Trump should fulfill his obligation to name public trustees to the Social Security Trust Funds, and the Senate should hold confirmation hearings on those appointments. By recognizing the value of having public trustees, the federal government can honor the public service of ordinary Americans willing to share their views about this key government program.